Wow, just checked out Russell’s link here and was surprised-but-not-really to find NZ has the fewest available titles in the world!
Netflix has been in New Zealand for about a month. It takes time to negotiate rights for content. In many cases they'll have existing licensing deals in place that aren't easily modified - so NZ rights will probably be added when those agreements are up for renewal.
Also, just curious, but how do content creators actually get paid when their stuff is licensed to netflix? Lump sum? Per view?
I'm not 100% sure for Netflix, but my assumption is that it's lump sum. The goal for Netflix is to have a broad enough range of content to be able to appeal to the widest audience possible - some may get very few views (not enough that a pay-per-view license would be appealing to the distributor) but it's important to have that variety.
The same is true of Sky (and subscriber TV in general) - the most popular channels effective subsidise the more niche content.
And I assume content creators get a cut of sub-licensing deals with other regions, correct?
Each region is licensed separately, although there is sometime bundling (like I assume most of Netflix's content here is negotiated as an Australia/NZ combo).
Also it may be uneconomical to license some content here - shows like Friends. Netflix paid about $500,000 per episode (nearly US$120 million) for the rights to the whole series. It's easy to imagine, given that precedent, that Netflix was unable to strike a reasonable deal for the show in this region.
It’s almost impossible to make a living as a musician in NZ. Does that mean we have less music? It doesn’t seem so.
Yes, and the basically unpaid content you can look to YouTube.
I read Russell’s comment as meaning more: ‘it’s the one that is currently in use’ – rather than ‘works’… that seems to be a subjective view.
At this point there isn't really an alternative. The money is still all tied up in broadcast. Basically broadcasters pay a high premium for a period of exclusivity within a region. Distributors aren't going to sell VOD rights in a region before they've tried their hardest to maximize revenue with a broadcast sale first.
Until there are non-broadcast rights sales that are valuable enough to make up this difference it's going to remain the case.
These comments are frustrating. Probably just as well I didn’t read this yesterday to get into arguments here.
I work in the TV industry – my livelihood and my family’s welfare are ultimately connected with the ability of the industry to function.
I also like TV, lots of which I can’t easily watch here ‘legally’. So I’ve torrented and I’ve been using an anti-geoblocking DNS service for years – I’ve even blogged about how to use the same service.
But I understand and respect the industry and business model from which the content we currently enjoy is derived. I understand why we can’t have everything we want all the time right now. And I understand why TVNZ, TV3, Sky and Spark/Lightbox feel they need to protect their investment.
I also suspect their interpretation of the law is probably too broad and that Global Mode is legal.
People complaining about the obsolete business model need to understand that, as Russell said at the start of the comments, it’s the one that currently works.
If the current model were dropped overnight – if geographic rights and windowed exclusivity were to be abolished tomorrow – we’d soon have a LOT less content to enjoy.
The reason the industry is hanging on so heavily to the model is that there isn’t currently a clear path forward. Gradually as the market for SVOD and other online rights expands and the potential value of those sales increases then a tipping point may be reached and an online-first model may be possible, but until then the whole revenue stream of the TV industry is inexorably tied to the regionalised broadcast-first model that make SVOD a second tier platform.
My personal suggestion is: Spend your subscription money locally then use bypassing services to increase catalogue if desired (this is mostly applicable to Netflix) – it will help grow NZ as an online content market and increase the willingness of providers to invest here.
It’s ridiculous that in this day and age the only numbers that matter are the people who watched the programme live-to-air. So many people watch CL in so many different ways. Even if you watch on the TV3 website you still sit through ads – are they counted? The number of shares / tweets videos receive should be counted. It is all valuable to the advertisers.
Basically live viewing is all anyone cares about because that's the number that matters to advertisers.
A 30-second ad in week night primetime on TV3 likely costs $3,000 - 6,000 (I can't find a TV3 ratecard, so that's a guess) depending on the predicted ratings.
On the other hand a 30-second ad in one of TV3's streaming video costs $120-160 per thousand views.
A 30 minute show has 7-8 minutes of ads. Where as that same show on the website has, typically, one pre-roll ad and 1-2 ads per break.
So that's the revenue model that TV3 is looking at.
I can’t remember the last time I watched CL live-to-air. I watch it later on MySky, or OnDemand, or if I don’t have time to watch the whole show, I just watch the video segments that I’m interested in. In some cases, I have shared videos well after the on-air date. All videos still had advertisements.
The live-to-air is the key. That's where it's typically assumed you actually watch the ads. While time-shifted viewings are calculated they are generally not appealing to advertisers (and thus broadcasters) as it's assumed that viewers may be skipping ads.
Online streams are fine, but the revenue from ads on streaming content is minimal (as per detail above).
I have never met nor ever heard of anyone who has a ratings box. Who has them? Where are they? When shows like CL depend on these numbers, the whole system just freaks me out. Sad face.
Arguably that's a problem. There are about 600 households in the survey so probably 1800-2000 individuals. I believe it's a sound model statistically, but obviously it has weaknesses.
I personally believe that broadcasters and ad agencies like that inaccuracy. I suspect more accurate measures may reveal that viewership is not exactly as it's assumed.
Arguably the whole TV advertising industry is smoke an mirrors to some extent - it's incredibly hard to gauge engagement or viewership accurately. Everyone just sort of agrees to go along with it in terms of value of given demographics etc.
But it's all we have at the moment.
John has battled the higher-ups to make his show not just about the things we want to see, but about the things we need to see. But in truth, his enemy is not those cruel-hearted industry execs who can’t see past the bottom dollar, he’s battling human nature and our waning attention spans.
Yes. Yes. That's exactly the issue.
We (the broad and general we) proclaim that we want important and noble TV... But then we (the broad one again) don't watch it.
In effect, “Vegetables should be available to people. Just don’t ask me to eat them.”
Obviously what Campbell Live needs then is the TV industry equivalent of a delicious cheese sauce!
Oh, maybe that's the cat stories?
I totally understand what you are saying Dylan. TV3 believes that the only way to make money is to sell 15 second advertising slots in their broadcasts and the value of those slots is determined by viewer numbers as measured by Neilson ratings.
I will repeat myself – that is dinosaur thinking. Classic not-to-bright managers failing to understand that media has changed. Like cutting costs and improving efficiencies in your floppy disc manufacturing plant.
You're definitely not wrong, but they're trapped somewhat. The business model in which they exist is very simple... Companies pay to put ads on, the cost of those ads is determined by the number of people watching (or at least the number assumed to be watching based on Neilsen's magic boxes).
Finding new ways to turn their content into cash is much easier said than done.
There are ultimately three options - 1) Adverstising, 2) Sponsorship/Product Placement/Native Advertising, 3) Subscription
Number 1, Advertising, is simple and indeed it's used to fund the cost of operating a streaming service online and may return a little profit, but at the scale and rates that exist it's not sustainable
Number 2, Native Advertising (or sponsorship or product placement), probably has the best prospect because value can be negotiated on a broader basis. Rather than just paying $x per view an advertiser is paying for the full association. But viewers quickly get hostile to what they feel to corporatisation of content and in a News and Current Affairs context it can become editorially complex.
Number 3, Subscriptions, is the best option on large scale, but doesn't work well at small scale. And it requires that the cost and revenue be averaged across a broad range of content/products. Also people are pretty unwilling to put their money where their mouth is.
Just look at Twitter - one of the most successful and disruptive communication technologies in recent memory, but it is still struggling to find a way to generate revenue - the best option it's found? Let companies inject ads into our Twitter stream.
It's easy to say they should be able to turn goodwill and critical popularity into revenue, but that's not how their business model works, and it's hard to see how they might develop a new model to exploit those things anytime soon - no other broadcast I'm aware of, anywhere, has managed to figure it out.
But you could look at HBO and it's critical success with John Olliver's show. They can devote money to that show because it's effectively subsidised by the wildly successful content that they package alongside it. But that's a pretty unique scenario. It's this reason that HBO, Showtime, Netflix and others have been able to take risks that networks and basic cable haven't been able to. Their successes fund their failures in a very predictable way.
There’s so much brilliant TV out there on Netflix (USA), Amazon Prime and Hulu Free that why would I bother watching TVNZ and TV3? Apart from The Nation and Q&A there’s nothing of any depth. News can be heard on RNZ or read and watched online.
And that's part of the bigger issue that broadcasters are facing now. People are choosing different ways to consume content.
It's not a new problem, just look at how the internet fundamentally changed newspapers - content was online for free, and classifieds (a mainstay of newspaper revenue) dried up.
Broadcast TV remains the most popular option for NZ (and worldwide) but that's changing fast and making the future very uncertain for an industry that is largely based on selling eyeballs to advertisers.
It would make more sense to sell TVNZ and use the money to set up a new public television service connected to Radio New Zealand.
...and then continue to fund it's operation from levies imposed on the broadcasting license of commercial broadcasters.
Yep, I totally get that. The problem to my mind is that we have put ourselves in a place where only $ and hence only ratings count.
I guess CL is actually being lamented as a (the?) last bastion of high-profile public service television in a country that has largely given up on such an endeavour.
But MediaWorks (and TVNZ) are wholy commercial. Their job is to make money.
Making good current affairs TV might be worth something for reputation points, but if that doesn't convert to viewers then it's not worth it for them.
What we actually need is a proper public broadcaster. Until then it's hardly reasonable to demand that a business make bad commercial decisions just because we like the idea of something.
Maybe the criticism will change TV3's mind, but then maybe it won't - because if they kill Campbell and put something else on we'll all have forgotten our outrage in 3 months anyway and if they haven't lost overall viewership then it was probably a good decision.
If Campbell Live does go off air I sincerely hope John gets to ply his craft elsewhere, but the problem is that without that public interest broadcaster there isn't an obviously place to put the show.